Finding the right binary options broker is an important part of your success as a short term trader. Yes, a working knowledge of the market will be helpful regardless of where you are trading, but the right broker can mean the difference between being profitable and losing money. If you take it a step further, you can guess that the perfect site can make a good trader a great trader. The following is designed to help you get started on picking a binary broker that is not only good for you, but one that will take your trading to the next level and help you to make even more money than you thought you could on your own. Here are the important things to look out for.
Unfortunately, this should be your first concern. There are a few scams out there, and you need to be aware of this. Most sites are reliable, but a few bad apples are not. Look around, read reviews, look for those sites that are being monitored by some sort of regulatory body. This will ensure that you don’t lose your money before you even begin trading with more accuracy. There are plenty of great brokers out there. Some, like those regulated in Europe (24Option, TradeRush) can be more selective about who they accept as clients because of ambiguities in United States law in regards to trading underlying assets, while others (like GOptions) fully embrace all legitimate traders. You will need to see what the legalities of binary options are in your locality and make the appropriate decision.
Also, look at the ease of use when it comes to the site. Make sure that nobody has reported having major problems with deposits and withdrawals, that they make education and demo accounts a priority, and that their customer service staff can help you if you need it for any reason. These are little things, but they do increase the reliability of the site and your success.
Most brokers have the same four categories of assets: stocks, indices, commodities, and currencies. Within these, there can be a lot of variation, though. Some sites have a heavy leaning toward U.S. stocks, while others are more European-based. This goes beyond stocks, of course, but these are the most heavily dependent upon location. Commodities and currencies are internationally traded, but again, some brokers will have some that others do not. You need to make a list of the assets you definitely want to trade, a list of those you might, and those that you have interest in. Then find the broker that has a priority on those that you have a priority on. This takes some time to figure out, but the search will narrow down your list of binary options brokers from dozens, to a more manageable number.
Now that you’ve found a site that has your assets available, you need to find the site that will give you the best returns, and this is most usually seen in the rates of return. If you are trading the EUR/USD most, and you’ll be trading it in 15 minute increments, why would you settle for a 68 percent return when you can get a 74 percent return? For every $100 you trade, that’s a $6 loss you would be seeing at the lower rate–even if you are correct in your prediction. Your rates of return are what will make or break you in this industry, and you need to milk them for all they are worth. You need to be aware of how often you need to be correct with your particular rates you are getting and then make sure that you are aware of the risk and reward beforehand. All of these things can be calculated by knowing your success rate in comparison to the rate of return you are getting.
Of course, there are other things to consider when it comes to rates. These include how often you will be using exotic trades like boundary and one touch trades, the rates on these, your success rate and frequency of use, and the insurance or “rebates” you will get on incorrect trades. Not all sites offer these things, and you might never even wish to use them. But they do exist, and they might appeal to you, so know that they will also influence your winnings and losings. It really comes down to personal preference.
Finally, know that you can get a small edge if you utilize the bonuses that brokers will offer from time to time. You can usually get one when you first make a deposit. These are not a primary, or even a secondary, concern, though. They are usually just a little incidental that comes along with your success. Why? Because the only people that will ever actually get to hold their bonus in their hands are the ones that are already successful. Brokers make it so that bonuses are not actually free money, but rather a reward for being profitable.
Here’s how they work. You deposit $10,000 into a broker and get a 50 percent welcome bonus of $5,000. You now have $15,000 to trade with. But, in order to see your $5,000 in the form of a withdrawal, you need to trade 30 times that number, or $150,000. Trading this much money is going to separate the wheat from the chaff, ultimately. If you can get to that high number and be profitable, you will get your $5,000 back, but if you are not a winning trader, you will have lost your $10,000 well before you get to $150,000. This is why you need to focus on the first three steps before even worrying about your bonus. If you aren’t at the right broker to bring you success, this will never actually come to fruition for you.